Cloud is expected to disrupt the technology landscape and continue its stronghold in the enterprise segment in 2017. Cloud player AWS is ramping up its India operations to ride the cloud wave. In an extensive interaction Bikram S Bedi, Head of India, Amazon Web Services spoke to CIO India about cloud conundrum and its uptake across India organizations.
What’s the report card of AWS India from CIOs and companies of both types - those that have legacy and those that were born to cloud? Does the adoption rate differ?
The ‘Born in the cloud’ enterprises like Internet companies and startups are early adopters primarily due to their key demands around agility and innovation. That space is clearly decided on cloud to be the preferred route and AWS seems to be the default option.
In the enterprise space, lot of education is brewing for the last eighteen months as CIOs, CDOs, CMOs and other stakeholders of Indian companies are now asking the right questions, seeking more information and starting to move Apps (less or more) to the cloud. About two years ago, we had a few enterprise customers like Tata Sky (for their website), Tata motors (for digital marketing). Apeejay has shut down its datacenter and migrated to AWS cloud. In 2016 we saw the number of AWS customers swell in India.
Amazon and AWS understands the whole digital play as the largest of the startups are built on our platform. We bring adequate skillsets and long term experience on the table. Large startups, internet companies and now enterprise companies like GE, Shell are building their digital presence on AWS platform.
AWS launched its first datacenter in India last year. What has been the reaction?
In June 2016, we launched the India region. Our architecture is different from other vendors through Availability Zone concept which is a multitude of one or more datacenters. India now has two availability zones (Mumbai as a region) which are public facing and one internal facing which are connected to low latency links.
Our competition typically works with two regions either in Delhi, Mumbai/Pune or Chennai/Bangalore. Their idea of region is equal to concept of availability zone. Enterprises can choose Apps across these zones in a high availability basis. If one app server went down the other zone would scale up to allow zero downtime architecture. In the competition the workload has to run across all regions and it works like a DR in case of failure.
There has been a massive spike in business since the India launch with startups, media, banking, insurance, and manufacturing and across workloads of SAP, Oracle, Microsoft (Dynamics, Exchange, Navision).
Do CIOs still feel their company data is safer in local datacenter within their country or city?
There is compliance with public sector and telco wherein the government data and CDRs of respective verticals cannot go outside the country. Some banks ran internal workloads like learning management systems on AWS as they wanted to put customer facing data or financial data once AWS had India as region. Such companies and others can now consider AWS services for all types of workloads.The control remains with CIO whether the data or Apps are in colo, managed hosting service or own DC or AWS. AWS cloud gives scale, security, cost optimization and low cost, flexibility and agility without being locked into a contract.
Are cloud budgets emerging out of CIO’s ‘lights on’ IT budgets or the innovation budgets?
It was earlier out of innovation budgets but now the cloud budgets are from mainstream. Over the last 18 months, the kind of workloads like S4 Hana, Hybris on AWS, Oracle, Microsoft are mainstream. We have many SAP wins in past year in India. The digital initiatives of the enterprises don’t come from IT budget. However many incumbent companies who want to launch digital or ecom sites quickly, often choose AWS over traditional OEM stack to be running within a few weeks. The website, digital presence, storage, archival, DR are all mainstream workloads coming out of CIOs’ budgets.
Do AWS sales folks pitch the cloud to companies’ CIOs or C-Suite execs like CDOs, CFOs, CMOs?
CIOs are important stakeholders and our business development team works closely with CIOs of organizations. AWS is also working with LOB and BU also. The IT team works towards archive, storage solutions but company’s business head gets involved to understand the scale of cloud. The cost of ownership play has to be understood by CFO. CISOs must be convinced that cloud is not endangering the company’s security posture. And the aye from CDO or CMO for brand campaign etc is needed.
Digital is not only building company’s websites. It is also the ability to scale and provision IT resources in case of viral social posts which is role of CDO. The digital conversation with a 360 degree approach is not limited to CIOs alone but talking to the business stakeholders and tech team about the transformation in the organization’s approach to manage IT infra.
Doesn’t interaction with different stakeholders’ increase the sales cycle for cloud than the traditional on premise IT stack?
Our business model is very different than the old guard (traditional IT OEMs) world. Tech OEMs would sell as much IT stack as possible and the CIO would aim for the best discounts on the deal. He would integrate and implement the stack of hardware and software as per the requirements. The IT vendor moves to the new customer as the existing customer would not give new (big) orders for couple of years.
AWS has completely flipped the model. There is no capex with our services. Unlike other vendors we don’t lock the companies into 6 month or 3 year contract.
Price is the crucial aspect. With more customers, the better economies of scale helps take the cost out of infra which is then passed back to customers as discount or price drop. Amazon’s forte is high volume, low margin businesses be it Retail, Kindle, AWS, Prime. Lower price leads to attracting more customers for Flywheel (all Amazon business runs on this concept) to stay self-operating. AWS had 58 price reductions in last 10 years.
Amazon’s forte is high volume, low margin businesses be it Retail, Kindle, AWS, Prime. Lower price leads to attracting more customers for Flywheel to stay self-operating.
The customer- big or small- can log onto AWS, create an account, choose the listed price and use our services. We work with CIOs to drive the conversations around innovation and how they use our services to better their IT architecture.
How often does AWS run into the old guard vendors as competition to win a deal?
There are no purchase orders and no quarter-end pressures. The old guard vendors often camp at the customer place to enter the RFP into their systems on month or quarter end. Organizations use IT platform because of better quality of service and the fact that we keep lowering the price. It doesn’t take long to get purchase orders as the focus is increasing the usage of our services by the customer as they trust us over time.
Many of traditional OEM models in IT industry have been disrupted by AWS. A prefixed solution stack cannot be forced upon the end user organizations. We begin with the customers’ needs and walk backwards to fulfil their IT needs in most effective and affordable price.
Also Read : 10 examples of the AWS path of disruption
Has cloud really moved from hype to hope for countries like India?
Cloud is now the new normal. Most Indian organizations are contemplating to move company’s IT workload or App first on the cloud. Cloud is not hope or French anymore but it is mainstream.
Every company investing in technology wants digital presence and AWS becomes the first choice be it hospitality, travel, manufacturing etcetera. The new apps or the traditional IT Apps are migrating from on premise to cloud. We work with partners like SAP to help them understand the value prop. The same holds true for workloads of Oracle, Microsoft, Infor who have invested in AWS.
Cloud is not about cost but the agility and scale it provides for internet companies and modern organizations to adopt this route. The ability to experiment and innovate is much higher with cloud. Traditional datacenters aren’t meant for the new world especially when an App goes viral or scale needed is more than on premise IT stack.
How would the pie-chart of cloud - private, public and hybrid – change across India Inc. over next few years?
The definition of private and public cloud is pretty undefined. The cloud should deliver no capex, infinite scale, lower TCO, global deployment, elasticity (pay for what you use). None of these characteristics exist in private cloud as defined by most people. You still buy hardware, software, set up datacenter, put an orchestration layer and share on intra department level.
There is only one cloud and that’s the cloud we offer. AWS has 70 plus services including software, hardware, security, Today, organizations run their workloads in their own DC and then there is AWS. The ratio I assume could be 80:20 or 70:30. But in the fullness of time - three to five years) - the ratio will flip over with the majority of apps and workloads would run in AWS kind of infra.